How advisers can overcome ‘onerous’ DDO compliance

Morningstar products launched earlier this year — Morningstar Direct, Adviser Research Centre, AdviserLogic and Data Feeds — aim to streamline compliance within the new laws set to start on 5 October.

The products offer a range of features to assist advisers, including the ability to download target market determination (TMD) documents and product disclosure statements from the product providers, gaining access to underlying data related to the TMDs and file note categories to support record-keeping requirements.

TMDs are also available on all of the products.

Morningstar’s head of product and client solutions, Graham Dixon, said it is “crucial” that advisers and licensees have the correct systems in place for the new obligations and that the company has already been contracted to provide support to a number of platforms ahead of the start date.

“Adviser and licensee reporting obligations are quite onerous under DDO and could lead to a lot of manual work, such as comparing TMDs against client records and reporting to issuers,” Mr Dixon said.

“Thankfully, with standardised data formats, much of this manual work can be automated or minimised — even simple things like knowing the issuer’s email address to send reports to.”

The new product offerings come after ASIC was called on to remove formal reporting periods from the DDOs, which the Financial Planning Association of Australia (FPA) slammed as “unnecessary and unworkable record-keeping and reporting requirements for financial planners”.

“There is an opportunity for ASIC to create an alignment between dispute resolution and TMD reporting to remove further layers of unnecessary regulatory burden, duplication and costs on our members and the profession,” FPA’s head of policy, strategy and innovation, Ben Marshan, said earlier this month.

The corporate regulator released an additional information sheet on the DDOs last Friday.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.